This proposal is for a competitive renewal of a study that compares the cost-effectiveness of two approaches to treating people who have dual diagnoses of severe mental illness and substance use disorders. We contrast Continuous Treatment Teams (CTT), which integrate direct treatment for substance abuse and psychiatric disorders in an intensive outreach approach, with traditional Community Support Programs (CSP), in which case managers seek to link clients to appropriate treatment providers. We are requesting funding to complete the study as originally proposed and to extend the follow-up period from two to three years. Two hundred forty clients have been randomly assigned to either CTT or CSP at a total of seven Community Mental Health Centers (CMHCs) in New Hampshire. Implementation of the two treatment models has been monitored carefully, and our initial data show that CTT and CSP approaches differ significantly in the types and amounts of treatment. Since our original submission, we have tested and refined our procedures for measuring the social (societal) costs associated with dual diagnoses. In response to the review committee's request, we have also developed an approach for combining multiple outcomes in a cost-utility analysis (CA). The CA considers the utility of treatment from the perspectives of three groups: clients, families, and treatment providers. Because of difficulties associated with dual disorders, these clients are widely believed to be particularly high resource users. We hypothesize that total resource use by CTT clients will decrease over time, even though the initial investment of time and resources per patient may be greater than that of the CSP approach, and that CTT will be more cost-effective than CSP within the three year follow-up period. Questions of social costs such as community and family burden have become more important as people with severe mental illness spend less time in hospitals and more time at home or in the community. Previous mental health cost studies used indirect methods for estimating community and family costs, measured them incompletely, or used crude estimates. In this study we have improved on existing techniques for documenting use and costs of community and family resources. We hypothesize that CTT clients will use fewer family and community resources than CSP clients during the follow-up period.